Moody’s: A Democratic Election Sweep Would Be Great for the Economy

What kind of economic growth can we expect if Joe Biden wins the presidency in November and Democrats sweep Congress? And how does it compare to a hypothetical Trump victory and a Republican sweep? The boffins at Moody’s Analytics took a look at the likely impact of economic policy in both scenarios and came up decidedly bearish on Republicans:

The economic outlook is weakest under the scenario in which Trump and the Republicans sweep Congress and fully adopt their economic agenda. In this scenario…it is not until the first half of 2024 that the economy returns to full employment…unemployment remains persistently higher…labor force participation rate that never fully recovers to its pre-pandemic highs…real after-tax income does not change much during the president’s term…The economy suffers in Trump’s second term, as we expect he will double down on the foreign trade and immigration policies he pursued in his first term…The significant increase in tariffs during Trump’s first term—from an effective tariff rate of 1.5% when he took office to a peak of more than 6% just prior to the Phase One deal—acted like a tax increase on the U.S. economy, hurting U.S. manufacturers, transportation companies, and farmers in particular. More of the same is expected in Trump’s second term.

Whew. That’s pretty brutal. Here’s a comparison in brightly colored chart form:

In every possible category, a Democratic sweep is better for the country than any other scenario. Moody’s even projects that Democrats would be better for the budget deficit than Republicans.

You can read the full report here, but it’s pretty easy to summarize. If Democrats win, they’ll spend money to stimulate the economy out of its COVID-19 funk and this will help everybody. The spending will largely be financed by taxing the rich, which has only a small negative effect on the economy. But if Republicans win, they’ll keep the purse strings closed and instead pursue yet more tax cuts for the rich and trade wars with China. Neither one is especially good for the economy. It’s so simple.

WE'LL BE BLUNT:

We need to start raising significantly more in donations from our online community of readers, especially from those who read Mother Jones regularly but have never decided to pitch in because you figured others always will. We also need long-time and new donors, everyone, to keep showing up for us.

In "It's Not a Crisis. This Is the New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, how brutal it is to sustain quality journalism right now, what makes Mother Jones different than most of the news out there, and why support from readers is the only thing that keeps us going. Despite the challenges, we're optimistic we can increase the share of online readers who decide to donate—starting with hitting an ambitious $300,000 goal in just three weeks to make sure we can finish our fiscal year break-even in the coming months.

Please learn more about how Mother Jones works and our 47-year history of doing nonprofit journalism that you don't find elsewhere—and help us do it with a donation if you can. We've already cut expenses and hitting our online goal is critical right now.

payment methods

WE'LL BE BLUNT

We need to start raising significantly more in donations from our online community of readers, especially from those who read Mother Jones regularly but have never decided to pitch in because you figured others always will. We also need long-time and new donors, everyone, to keep showing up for us.

In "It's Not a Crisis. This Is the New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, how brutal it is to sustain quality journalism right now, what makes Mother Jones different than most of the news out there, and why support from readers is the only thing that keeps us going. Despite the challenges, we're optimistic we can increase the share of online readers who decide to donate—starting with hitting an ambitious $300,000 goal in just three weeks to make sure we can finish our fiscal year break-even in the coming months.

Please learn more about how Mother Jones works and our 47-year history of doing nonprofit journalism that you don't find elsewhere—and help us do it with a donation if you can. We've already cut expenses and hitting our online goal is critical right now.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate